The statutory exemption of the impatriation premium (Article 155 B‑I‑1 of the French Tax Code) sometimes requires compliance with specific contractual formalism, which has given rise to contrasting case law.
ADMINISTRATIVE GUIDANCE
The actual impatriation premium
The actual impatriation premium “must appear distinctly in the employment contract or corporate office agreement of the relevant employees or executives, or, where applicable, in an amendment thereto, drawn up prior to taking up duties in France” (BOI‑RSA‑GEO‑40‑10‑20‑20250811, n° 60).
“However, it is accepted that the ‘impatriation premium’ may be determinable on the basis of objective criteria mentioned in the employment contract or corporate office agreement. This is the case, for example, of an ‘impatriation premium’ consisting of the provision of housing in France or set as a percentage of fixed remuneration, a percentage of base remuneration including a variable component, or a percentage of the sole variable component of remuneration” (n° 70).
The lump‑sum impatriation premium
“Employees or executives recruited directly abroad by a company established in France may opt for the lump‑sum evaluation of their impatriation preium, whether or not the premium is provided for in the employment contract or corporate office agreement” (n° 80).
Employees or executives called by a foreign company to take up a position within a company established in France, where the start date occurred on or after 16 November 2018, may also opt for the lump‑sum evaluation (the option having been extended to these individuals by the 2019 Finance Act, see n° 102).
“In the event of opting for the lump‑sum evaluation, the impatriation premium is deemed equal to 30% of total net remuneration, meaning remuneration net of social security contributions and the deductible portion of the CSG, but before the 10% standard deduction for professional expenses or, where applicable, the deduction of actual expenses. This remuneration includes all bonuses and allowances provided for in the contract and taxable under the ordinary salary rules, excluding in particular amounts paid or gains realized under employee savings or employee shareholding schemes” (n° 90).
CASE LAW
The “formal” approach
The tax judge denied a taxpayer the benefit of the 30% lump‑sum exemption on the grounds that “it follows from the case file, and in particular from Mr. X’s employment contract and the certificates issued by his employer, that the applicant performs his professional activity exclusively in France and receives no additional remuneration linked to this situation” (TA Rennes, 13 February 2014, no. 1101273). Same approach: TA Caen, 22 May 2015, no. 1401719.
According to wording repeated in several cases, Article 155 B‑I‑1 of the French Tax Code implies that “only additional remuneration directly linked to the impatriation situation may be exempted, including when evaluated on a lump‑sum basis.” After noting that the employment contracts provided for a base salary, a thirteenth month, and a holiday bonus “without any of the amounts being presented as linked to the impatriation situation,” the courts held that the tax authorities were entitled to refuse the lump‑sum option (TA Cergy‑Pontoise, 5 July 2022, 2nd Chamber, no. 1906595; TA Cergy‑Pontoise, 9 May 2023, 2nd Chamber, no. 2013215). Same approach: TA Cergy‑Pontoise, 29 May 2024, 8th Chamber, no. 2007371; TA Cergy‑Pontoise, 14 November 2024, 5th Chamber, no. 2214943.
The “informal” approach
It follows from Article 155 B‑I‑1 of the French Tax Code “that when the taxpayer opts for the lump‑sum evaluation of the exemption applicable to his remuneration, the 30% exemption applies to all taxable remuneration, as defined in particular in Article 80 duodecies of the same code relating to severance payments” (Conseil d’État, 4 October 2023, nos. 466714, 9th and 10th chambers combined). Consequently, the Conseil d’État held that “by ruling that the bonus at issue, paid upon termination of the employment contract, could not be regarded as part of Mr. B.’s remuneration for the purposes of Article 155 B of the French Tax Code on the grounds that it was intended to compensate for the loss of the contract and did not correspond to consideration for work or services performed, the Court of Appeal mischaracterized the facts.” Quashed decision: CAA Paris, 15 June 2022, no. 21PA03658. Decision on remand: CAA Paris, 31 January 2025, no. 23PA04242.
After noting that the conditions invoked by the tax authorities were satisfied (tax residence, compliance with reference remuneration, and being called from abroad to work in a French company), the first‑instance judge held that “the premium may be evaluated on a lump‑sum basis at 30% of total remuneration, including when it is not provided for in the employment contract” (TA Paris, 19 December 2025, 2nd Section – 1st Chamber, no. 2326171).
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A duality of case‑law positions creating legal uncertainty
- The formal approach does not derive from the law and even contradicts administrative doctrine on the lump‑sum evaluation of the impatriation premium.
- The informal approach is more consistent with the principle of evaluating the bonus on a lump‑sum basis (especially since compliance with the reference remuneration implies the existence of additional remuneration eligible for exemption).
In practice, it is advisable to secure contractual aspects to limit the risk of challenges by the tax authorities and/or the tax judge.
Further reading